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Bill It, Kill It, or Keep It Free?
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Bill It, Kill It, or Keep It Free?


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Editorial Rating

8

Qualities

  • Applicable
  • Concrete Examples
  • Insider's Take

Recommendation

Growing a company’s bottom line doesn’t always require finding new markets or attracting more customers. Plenty of opportunities exist to generate extra revenue for services companies already provide for free. Writing for MIT Sloan Management Review, marketing professors Wolfgang Ulaga and Stefan Michel lay out how companies can start charging for some of their services without jeopardizing sales quotas or customer satisfaction. Their well-researched case for “free-to-fee” transitions will motivate business executives to take a closer look at their business models.

Take-Aways

  • Companies often provide free services to set themselves apart from the competition or to secure long-term customers. 
  • Although free services can be a valuable component of a company’s sales strategy, they don’t always fulfill a strategic purpose and thus turn into a missed opportunity to generate revenue.
  • Failing to charge for services may send the wrong signal to staffers, resulting in poorer service. Customers might also get used to receiving services free of charge. 

About the Authors

Wolfgang Ulaga and Stefan Michel are marketing professors at INSEAD in Fontainebleau, France, and at IMD in Lausanne, Switzerland, respectively. 


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